Internal gas market: the Commission takes Poland to Court over regulated gas prices for business consumers

Today, the European Commission decided to refer Poland to the Court of Justice of the European Union for failing to comply with the EU internal energy market rules. Under the Gas Directive (2009/73/EC) prices should primarily be determined by supply and demand. State-set tariffs for non-household end-users impede new gas suppliers from entering the gas market and do not allow Polish consumers to reap the full benefits that the internal market can offer.

According to EU law regulated prices can only be applied in exceptional circumstances and not as a main rule for price setting: a number of strict conditions have to be met, including a proportionality requirement.

The Commission considers that the Polish legislation fails to respect the requirements of EU law in important aspects, in particular

it does not set a time limit for the application of regulated prices;

the Polish system applies to all non-household users, regardless of their size and situation.

The Commission opened an infringement procedure on this issue in June 2009. Despite numerous exchanges with the Polish authorities in the course of the procedure, Poland has failed to bring its price regulation system in conformity with EU law. The Commission has therefore decided to take Poland to Court.

Background

Internal energy market legislation (Directive 2009/73/EC) offers consumers the freedom to choose their supplier. The European objective, as confirmed by the Heads of State and Governments at the European Council in May 2013, is to establish a genuine European internal energy market by 2014. This will enhance security of supply and guarantee consumers more choice and the best possible service. The existence of a competitive EU internal energy market is the best way of ensuring security of supply and competitive energy prices. Regulated prices distort the markets as they do not reflect actual demand and limit effective competition. Furthermore, they can prevent new arrivals from entering the market. Therefore, and as confirmed by the jurisprudence of the Court of Justice, regulated prices may be adopted only when they serve the general economic interest and are proportionate, clearly defined, transparent, non-discriminatory and verifiable. The Court of Justice has confirmed this principle in its Federutility and ENEL judgments of 2010 and 2011.